Following Under Armour Inc (NYSE: UA) (NYSE: UAA) fourth-quarter miss, Wells Fargo said this is a game changer and downgraded the shares of the company.

The company announced before the markets opened on Tuesday fourth-quarter earnings and revenues that missed estimates. The company also announced the departure of its chief financial officer Chip Molly after being in office for barely a year. Wells Fargo sees the CFO resignation clouding the story.

Revenues, EPS Miss

Reviewing the results, the firm noted that revenues rose 12 percent in the fourth quarter, notably lower than the 20 percent growth guidance and marking the slowest revenue growth since the recession. Consequently, the earnings per share came in at $0.23, missing the consensus estimate of $0.25. The firm also noted that gross margin contracted 320 basis points compared to the guidance for flattish performance, as top-line weakness forced the company to go highly promotional.

Legacy Business Hurts

Analysts Tom Nikic and Ike Boruchow noted that the company's core business, namely the North American wholesale apparel (accounting for 83 percent, 67 percent and 65 percent of revenues, respectively, is decelerating faster than expected. The company was unable to offset the weakness in its legacy business despite rapid expansion of its key growth drivers, the analysts added. The analysts clarified that key growth drivers included footwear (36 percent growth), international (60 percent growth and accounting for 15 percent of sales) and direct-to-consumer (23 percent growth).

Trimming Estimates, Lowering Rating, Price Target

While noting that Under Armour shares trade at about 45 times its forward earnings, the firm believes risk to multiple remains even if earnings have troughed. The firm also cut its 2017 earnings per share estimate to $0.42 from $0.65 and that for 2018 to $0.50 from $0.76.

As such, Wells Fargo downgraded shares of the company to Market Perform from Outperform and also lowered its valuation range for the shares to $15–$20 from $36–$38.

At the time of writing. Under Armour shares were tumbling 21.56 percent to $19.63 on roughly 17 times average volume.